Stock Smart Weekly (Apr 09, 2021)
StockSmart
Weekly Review
Continuing with the previous week’s corrective mode over concerns on rising COVID cases in the country, market was down 752.7pts or 1.7%DoD on the first day of the week before giving a sharp recovery in the remaining days to close at 45,186pts, +2.0%WoW. Stronger growth forecasts by IMF (FY22: 4.0%), and lower than expected inflation reading in Mar’21 (9.05% compared to 9.5% market consensus) acted as a catalyst to change investor sentiments followed by US$2.5bn inflows from Eurobond. Other news flows during the week were, i) ease-off in political climate as divide incurred within the opposition alliance, ii) Cement sales registering a growth of 44.4% in Mar’21, iii) successful diplomatic concurrence during the visit of Russian foreign minister and the US pushing Pakistan and India for dialogue putting concerns over depleting relationship between Pakistan and US at rest, iv) PkR0.64/unit fuel adjustment approved by NEPRA, and v) IMF report casting light on timeline for potential release of payments under MoU signed by the Govt. and IPPs. Sector-wise, amongst major sectors, Engineering and Cements gained 6.0%WoW and 5.5%WoW, respectively on expectation of stronger results whereas E&Ps and Autos witnessed flattish performance. Overall, sector charts are topped by Cable and Electricals and Technology sector, +8.3%WoW each while sugar stood most as a laggard (down 5.5%WoW). Flow-wise, foreigners accelerated their selling spree, squaring-off positions worth US$9.5mn while it was absorbed by participants across the board primarily by Banks and companies with net inflow of US$3.1mn and US$2.5mn, respectively. Stock wise, top performers include, i) TRG (+17.2%WoW), ii) INIL (+10.4%WoW), iii) PIOC (+10.4%WoW), iv) PAEL (+10.3%WoW), and v) KTML (+10.1%WoW) whereas laggards were, i) INDU (down 4.6%WoW), ii) PSMC (down 3.0%WoW), iii) IGIHL (down 2.9%WoW), iv) OGDC (down 2.3%WoW), and v) PKGS (down 2.1%WoW).
Outlook
Result season is likely to define market sentiments in the near term where major companies due to announce their financial results are FFBL and EPCL. Overall, we expect Cements, Chemicals, Steel, and Autos to outperform in the current season. In the medium run, potential tax measures in the upcoming budget remains a key headwind and any correction in this regard should be taken as an opportunity for accumulation. We advocate for taking positions in Cements, Steel, and Construction-Allied whereas recent appreciation has also opened up prospects for Autos.
AKD Research
TRG Pakistan Limited is a holding company. The principal activity of the Company is to acquire, invest and manage operations relating to business process outsourcing, online customer acquisition, marketing of medicare related products, and contact center optimization services through its subsidiary, The Resource Group International Limited. It operates through four segments: call center, software and artificial intelligence business, medicare health insurance and market research. Its call center segment involves the provision of customer service support through telephone. Its Software and artificial intelligence (AI) segment provides optimized call outcomes for contact centers by pairing agents with callers based on behaviors and other related data. Its Medicare health insurance segment is engaged in marketing medicare insurance policies to senior citizens and other eligible individuals in the United States. Its market research segment provides analytical and consultation services.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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